Is now the time to consider equity release?

Find out more about releasing tax-free money from your home

Equity release is a means of accessing a percentage of your property value while still living in your home. The money that you release is tax-free and can be accessed as a lump sum or smaller instalments at a later date.

With the most popular form of equity release, a lifetime mortgage, you also continue to own 100 per cent of your home.

The amount of money that you can access is determined by the age of the youngest homeowner and the value of your property. You must be at least 55 years old to consider equity release and your property must be worth £70,000 or more.

One of the main benefits of equity release for many people is that it provides you with a tax-free lump sum of cash and you’re not required to make any monthly repayments if you don’t wish to.

How is that possible, you may ask?

The money that you release, plus the interest that you accrue, is repaid when you die or go into long-term care and your property is sold.

There are also now plans that allow you to pay off some of the interest each month and you can choose the percentage that suits you. By paying a percentage of the interest you can reduce the amount of debt that is being rolled up.

This rise in popularity of equity release means that there is now a wide range of plans available and half of all products currently offer rates of under four per cent, giving homeowners more product choice and low interest rates which they can fix for life.

Safeguarding for your loved ones

You may be concerned about passing on debt to your family, but all equity release plans come with a no negative equity guarantee, which means that you can never pass on the debt to your estate, providing the property is sold for a reasonable amount.

There are also plans that allow you to safeguard a percentage of your property value so that you can still pass on an inheritance to your loved ones.

Get advice

Equity release isn’t right for everyone and it’s important that you understand what it could mean for you.

The Mail Finance equity release service will provide you with a free quotation with no obligation to proceed. They will provide you with a personalised illustration which outlines the features, but also the risks of equity release so that you’re fully informed. For example, equity release could affect potential inheritance and your entitlement to means-tested benefits now or in the future.

During the quotation your advisor will explain that equity release may involve a home reversion plan or a lifetime mortgage, which is secured against your property. The advisor will also explain that once you’ve paid off any existing mortgage, the money that you release is yours to enjoy spending.

Any money released, plus accrued interest would be repaid upon death, or moving into long-term care. Age Partnership provide initial advice for free and without obligation. Only if you choose to proceed and your case completes would a typical fee of £1,795 be payable.